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CCA Supports Lifeline Reform that Puts Consumers First

By Steven K. Berry, President & CEO, CCA

Today the House of Representatives will consider H.R. 5525, the “End Taxpayer Funded Cell Phones Act,” which aims to prevent consumers from receiving Universal Service Fund (USF) Lifeline program resources for mobile services. While CCA supports appropriate USF reform, this legislation fundamentally misses the mark regarding the Lifeline program. The Federal Communications Commission (FCC or Commission) recently implemented new program reforms to remove waste, fraud, and abuse from the program and Congress is working on productive reform efforts as well. What’s more concerning, H.R. 5525 would put vulnerable Americans at risk of losing the ability to connect. Further, this bill would create a new tax on telecommunications consumers. It is for these reasons that CCA opposes this legislation.

Just a few months ago, the FCC adopted significant reforms to the Lifeline program to address perceived and actual waste, fraud, and abuse, and the Commission refocused the program via the Lifeline Modernization Order of 2016. These changes reflect the continued increase in American consumers’ choice of mobile services to access voice and data products and services. Ownership of a cell phone is no longer considered a luxury – it is a necessity for today’s on-the-go society, and smartphones can provide consumers with access to broadband without the need for an additional (and often costly) computer to use with a fixed connection.

H.R. 5525 not only ignores the exponential rate of mobile broadband adoption in recent years, but it also creates an undue new tax on American telecommunications consumers. By requiring providers to continue to contribute to USF and diverting funds to the U.S. Treasury for deficit reduction, the bill would take an existing user fee and convert it into an arbitrary new tax on telecommunications services. Wireless consumers already contribute almost half of all contributions that make up the support for USF programs, more than any other telecommunications service, and placing a tax on-top of the user fee would serve to further diminish the vast benefits of USF for mobile services.

CCA fully supports efforts to root out waste, fraud, and abuse in the Lifeline program where appropriate, but this legislative approach uses a machete where a scalpel will do. USF, including the Lifeline program, must support mobile broadband services to ensure that all American consumers have access to the latest technologies and services. USF contribution reform efforts must equitably address the ongoing needs of the Fund, not create a new tax that will undermine the benefits of the USF program.